latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/chilean-lithium-miners-to-use-desalinated-water-to-quell-water-use-concerns-73789017 content esgSubNav
In This List

Chilean lithium miners to use desalinated water to quell water use concerns


Infographic: The Big Picture 2024 – Energy Transition Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023


Battery metals - unbated long term need for supply security despite short-term headwinds

Chilean lithium miners to use desalinated water to quell water use concerns

SNL Image

A poster in San Pedro de Atacama, Chile, on March 9, 2022, says, "You will drink lithium and eat copper when there is no more land left for you to violate." Chile produced about a quarter of the world's lithium in 2021.
Source: S&P Global Commodity Insights

Chile-focused lithium miners hope the construction of multibillion-dollar desalination projects in the country will ease tensions with locals who say mining is destroying their fresh water supply.

The South American country produced about a quarter of the world's lithium in 2021, largely via brine operations in the Salar de Atacama, a salt flat in one of the world's driest deserts. And President Gabriel Boric hopes to increase access to Chile's lithium riches, leading to more extraction of the silvery metal.

Charlotte, N.C.-based Albemarle Corp. and Santiago, Chile-based Sociedad Química y Minera de Chile SA, or SQM, will be increasing production capacity over the next few years, while Minera Salar Blanco SpA and Simco, a joint venture between Errázuriz Group and Taiwanese Simbalik Group, begin new extraction projects. Several exploration projects and a state-run lithium company are also under development.

Half of Chile's population lives in regions with scarce water and is dealing with a 10-year "mega-drought," according to Chile's water agency. As a result, mining companies are under pressure to reduce their water use or find new sources.

Water demand exceeds water supply in the Atacama region, which leaves mining projects, agriculture and small communities to compete for available resources. Although mining operations are only responsible for about 4% of the country's total water use, they have been blamed for the disappearance of local water sources. Lithium miners have specifically been blamed for declining soil moisture and a decrease in the number of flamingos in the Atacama salt flat. Desalination of coastal seawater may be the solution.

"Lithium is growing, and eventually, it will have to be fully supported by desalinated water," said Enzo Garcia, CEO of Bloom Alert, a company offering risk management services to the desalination industry in Latin America. "The biggest promoter of desalination are the copper mines which are also located in the Atacama Desert."

Public pressure on miners

Water problems in the Atacama region have become so severe that some local communities, such as the Indigenous Colla Pai-Ote and Atacameño groups, have become dependent on daily visits from tanker trucks for potable water.

"This monster is called 'mining with SQM or Albemarle,'" Rudecindo Christian, an Atacameño farmer and a candidate for the constitutional convention, said during a 2019 workshop. "It transforms the thoughts and way of life of [Indigenous] people in a way that causes division. They tell us lithium is clean. ... They're drying up our waters."

Local tensions with mining companies led to a proposed law in the 2022 draft constitution that aims to hold mining companies directly financially responsible for any environmental damages caused by their projects.

The government has committed to ensuring mining operations consume no more than 10% of total freshwater use by 2025 and no more than 5% by 2040. It also recently established a 30-year term on water rights allocated after 2022.

The Boric administration aims to create a national lithium plan "that is capable of expanding production with the objective of sustainable development in mind, of unrestricted respect for the environment, incorporating in all this discussion the complexity represented by the salt flats," Willy Kracht, Boric's mining advisor, said during an interview with local news outlet La Tercera.

SNL Image

Miners need an answer

New lithium mining projects in the Atacama region have limited options to access additional water after the government stopped issuing water rights for any aquifers in the area in 2017. Lithium developers can purchase water rights from other users, transport water from other regions or take cues from copper miners that, for the last two decades, have been developing desalination projects.

SQM uses well water for its Salar de Atacama mine in Chile, but the mining company is planning for the future. The company is developing the $1.5 billion Salar Futuro project, which includes a desalination plant and direct lithium extraction technology. The project is designed to increase SQM's total production to a range of 220,000 tonnes to 250,000 tonnes of lithium carbonate equivalent per year by 2030, compared to 150,000 tonnes in 2022, while not increasing overall water use. SQM is scheduled to submit an environmental impact assessment for the development in 2024.

"I think also it's important to consider that this project, of course, implies operation commitments that go far beyond the year 2030. So working in agreement with CORFO is necessary prior to its presentation to the environmental authorities for evaluation," SQM CEO Ricardo Ramos Rodríguez said during a conference call Nov. 17, 2022.

Albemarle extracts lithium brine from its Salar de Atacama mine in Chile and converts it into lithium carbonate and lithium chloride at the nearby La Negra plant. The company plans to invest $1 million in a desalination project by Chilean water infrastructure firm CRAMSA to secure up to 500 liters per second of fresh water at a fixed price starting in 2027.

The desalination project would provide all the freshwater needed to operate La Negra, which recently doubled its production capacity to over 80,000 tonnes of lithium carbonate equivalent per year. Desalinated water will allow the company to evaluate whether it will also use direct lithium extraction methods.

"One of our operations is located in the Salar de Atacama, where the Atacameño people have lived for thousands of years. That is why we decided to follow a relationship model with Indigenous peoples based on three pillars: sustainability, permanent dialogue and social value," said Ignacio Mehech Castellón, Albemarle's vice president of external affairs and Chile country manager.

Public wary of desalination

Chileans are nervous about the full implications of using desalination, an energy-intensive process with its own ecological risks, to solve mining's water problems. Scientists said the government will need to regulate the location of desalination plants to ensure brine deposits do not affect artisanal fishing or tourism.

"The absence of a general coastal legislation or framework has also resulted in high environmental impacts on the coast, with so-called 'sacrifice zones' ... as a result of pollution associated with a disproportionate industrial concentration ... such as thermoelectric plants, desalination plants," Christian Paredes, co-author of a proposal for a coastal protection law, said in a December 2022 statement.

But lithium extraction supporters see desalination as the silver bullet for lithium's water supply problems.

"I think now the biggest challenge is the social acceptance of the [desalination] industry, and of course, technology is growing at such a fast pace," Bloom Alert's Garcia said. "But this technology every day consumes less energy, less chemicals, and it's more efficient."

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.